TORONTO, Feb. 20 /CNW/ - For the three months ended December 31, 2006, total Leon's sales were $236,766,000 including $56,658,000 of franchise sales ($224,779,000 including $54,535,000 of franchise sales in 2005), an increase of 5.3% and net income was $20,712,000, $1.17 per common share ($19,658,000, $1.11 per common share in 2005), an increase of 5.4% per share.
In our fourth quarter 2007, we continued to see good growth in sales and profits over the prior year. We had a very successful grand opening of a new warehouse and showroom in Saskatoon, Saskatchewan and same store corporate sales were up 3.0% for the quarter.
For the year ended December 31, 2006, total Leon's sales were $768,453,000 including $177,167,000 franchise sales ($720,787,000 including $173,043,000 franchise sales in 2005), an increase of 6.6%. Net income was $53,602,000, $3.03 per common share ($48,964,000, $2.73 per common share in 2005), an increase of 11% per share. Same store corporate sales were up 3.9% over the prior year.
Overall, we are proud to report that Leon's Furniture Limited continued to increase sales and grow profits in 2006. We want to congratulate all our Associates across Canada for their strong efforts, hard work, and dedication in helping achieve these goals.
Major renovations are well on their way for existing stores in Kitchener, Ontario and Calgary, Alberta, scheduled for completion by the summer of 2007. A new warehouse and showroom in Newmarket, Ontario will open in March 2007. As well, a new showroom and warehouse in Longueuil, Quebec has commenced and should be completed by the fall of 2007.
The Directors are pleased to declare an increase of the quarterly dividend from 25 cents per common share to 28 cents per common share, payable on April 6, 2007 to the shareholders of record at the close of business on March 2, 2007. As of 2006, dividends paid by Leon's Furniture Limited are "eligible dividends" as per the proposed changes to the Income Tax Act (Bill C-28, Canada).
The 2006 Annual Report will be mailed in late March to shareholders of record on March 23, 2007. The Annual and Special Meeting of Shareholders will take place on May 14, 2007.
As communicated in a press release dated November 14, 2006, the Directors previously authorized the Company, subject to shareholder approval at its Annual and Special Meeting of Shareholders on May 14, 2007, to seek regulatory approval of the subdivision of its common shares and the convertible non-voting shares on a four for one basis.
EARNINGS PER SHARE FOR EACH QUARTER
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YEAR
MARCH 31 JUNE 30 SEPT. 30 DEC. 31 TOTAL
-------- -------- -------- ------- -----
2006 - Basic 55 cents 47 cents 84 cents $1.17 $3.03
- Fully Diluted 53 cents 45 cents 81 cents $1.12 $2.91
2005 - Basic 43 cents 43 cents 76 cents $1.11 $2.73
- Fully Diluted 41 cents 42 cents 74 cents $1.04 $2.61
2004 - Basic 40 cents 41 cents 75 cents 93 cents $2.49
- Fully Diluted 39 cents 40 cents 73 cents 89 cents $2.41
LEON'S FURNITURE LIMITED - MEUBLES LEON LTEE
Mark J. Leon
Chairman of the Board
Leon's Furniture Limited-Meubles Leon Ltee
Incorporated under the laws of Ontario
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
As at As at
December 31 December 31
(in thousands) 2006 2005
$ $
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ASSETS
Current
Cash and cash equivalents 28,172 19,074
Marketable securities 92,055 75,128
Accounts receivable 26,319 22,223
Inventory 74,733 72,644
Income taxes recoverable - 621
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Total current assets 221,279 189,690
Future tax assets 10,652 9,989
Capital assets, net 207,066 182,023
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438,997 381,702
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current
Accounts payable and accrued liabilities 94,023 75,485
Income taxes payable 2,963 -
Customers' deposits 12,887 9,496
Dividends payable 4,427 3,844
Deferred warranty plan revenue 12,487 10,299
Future tax liabilities 204 455
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Total current liabilities 126,991 99,579
Deferred warranty plan revenue 18,216 17,220
Redeemable share liability 631 406
Future tax liabilities 5,584 4,059
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Total liabilities 151,422 121,264
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Shareholders' equity
Common shares 11,538 10,968
Retained earnings 276,037 249,470
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Total shareholders' equity 287,575 260,438
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438,997 381,702
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Leon's Furniture Limited-Meubles Leon Ltee
CONSOLIDATED STATEMENTS OF INCOME AND
RETAINED EARNINGS
(UNAUDITED)
Period ended December 31st
(in thousands, except earnings per share)
3 months ended 12 months ended
2006 2005 2006 2005
$ $ $ $
Sales 180,108 170,244 591,286 547,744
Cost of sales 101,604 97,409 341,403 320,340
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Gross profit 78,504 72,835 249,883 227,404
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Operating expenses (income)
Salaries and commissions 24,515 22,252 89,413 79,960
Advertising 9,845 9,802 32,326 30,494
Rent and property taxes 2,809 2,227 10,656 9,518
Amortization 3,470 3,114 13,348 11,892
Employee profit-sharing plan 1,175 829 3,645 3,105
Other operating expenses 10,381 10,118 35,913 33,675
Interest income (697) (825) (3,539) (2,857)
Other income (4,541) (4,532) (11,370) (13,108)
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46,957 42,985 170,392 152,679
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Income before gain on sale
of capital property and
income taxes 31,547 29,850 79,491 74,725
Gain on sale of capital
property - - 2,010 -
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Income before income taxes 31,547 29,850 81,501 74,725
Provision for income taxes 10,835 10,192 27,899 25,761
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Net income for the period 20,712 19,658 53,602 48,964
Retained earnings,
beginning of the period 260,159 233,655 249,470 239,335
Dividends declared (4,427) (3,843) (26,554) (14,725)
Excess of cost of share
repurchase over carrying
value of related shares (407) - (481) (24,104)
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Retained earnings,
end of period 276,037 249,470 276,037 249,470
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Weighted average number of
common shares outstanding
Basic 17,706 17,677 17,700 17,963
Diluted 18,435 18,901 18,429 18,734
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Earnings per share
Basic $ 1.17 $ 1.11 $ 3.03 $ 2.73
Diluted $ 1.12 $ 1.04 $ 2.91 $ 2.61
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Leon's Furniture Limited-Meubles Leon Ltee
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Period ended December 31st
(in thousands)
3 months ended 12 months ended
2006 2005 2006 2005
$ $ $ $
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OPERATING ACTIVITIES
Net income for the period 20,712 19,658 53,602 48,964
Add (deduct) items not
involving a current cash
payment
Amortization of capital
assets 3,470 3,114 13,348 11,892
Amortization of deferred
warranty revenue (3,308) (2,355) (11,703) (10,129)
Gain on sale of marketable
securities (387) (786) (393) (1,962)
Future tax expense 1,221 794 611 1,115
Loss (gain) on sale of
capital assets (14) 1 (2,030) (96)
Cash received on warranty
sales 4,638 4,166 14,887 12,847
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26,332 24,592 68,322 62,631
Net change in non-cash
working capital balances
related to operations 4,236 7,342 16,656 (6,368)
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Cash provided by operating
activities 30,568 31,934 84,978 56,263
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INVESTING ACTIVITIES
Purchase of capital assets (9,146) (6,303) (35,843) (25,186)
Proceeds on sale of capital
assets 25 - 2,154 417
Purchase of marketable
securities (684,279) (717,189) (2,344,105) (2,328,397)
Proceeds on sale of
marketable securities 686,483 709,395 2,327,571 2,339,231
Issuance of series 2005
shares (note) - 7,535 - 7,535
Decrease in employee share
purchase loans 7 (7,505) 492 (6,839)
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Cash used in investing
activities (6,910) (14,067) (49,731) (13,239)
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FINANCING ACTIVITIES
Dividends paid (4,427) (3,563) (25,663) (14,538)
Repurchase of capital stock (412) - (486) (24,407)
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Cash used in financing
activities (4,839) (3,563) (26,149) (38,945)
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Net increase in cash and
cash equivalents during
the period 18,819 14,304 9,098 4,079
Cash and cash equivalents,
beginning of period 9,353 4,770 19,074 14,995
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Cash and cash equivalents,
end of period 28,172 19,074 28,172 19,074
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